WASHINGTON - In an unusual move, a federal judge here has reversed course and asked the American Bankers Association to intervene in an electronic benefits transfer case.
U.S. District Judge Emmet Sullivan, who rejected on May 9 the group's request to file a friend of the court brief, changed his mind this week.
In a May 22 order, Judge Sullivan asked the group to file a brief by May 31 and to participate in oral arguments June 8. The judge wants the group to explain why it believes nonbanks should be excluded from the bid process for federally sanctioned benefits transfer systems.
The judge extended similar invitations to the Southern Alliance of States and to the National Rainbow Coalition, a civil rights group that the Rev. Jesse Jackson founded in the 1980s.
Michael Crotty, deputy general counsel at the ABA for litigation, said the trade group will accept the judge's offer.
"Essentially, this is big business," Mr. Crotty said of the group's interest. "This is the coming thing. Someone has got to process it and we think it should be us."
Gil Schwartz, a partner at Schwartz & Ballen who has been monitoring electronic benefits transfer issues, said he is not surprised that the ABA is going to participate.
"This case points to a trend in the direction of who is going to have access and who will be the gatekeeper," Mr. Schwartz said.
The case began in March when Transactive Corp. sued the U.S. Treasury Department, charging that the government had unfairly excluded it from a March bid solicitation for an electronic benefits transfer system for eight states in the South.
The network, one of several regional ones being considered, would allow states to distribute welfare benefits electronically. It is part of a larger national effort to replace paper benefit checks with electronic systems. Currently, only Maryland operates such a system.
Judge Sullivan granted Transactive's request for a temporary restraining order to prevent the government from proceeding with the bidding process. The order essentially derailed Treasury's plan to get the southern state's system on-line by next March.
